S Kidman and Co owners will ask the federal government to clarify its preferred level of foreign ownership after the sale of the company was blocked by the Treasurer.
China's Dakang Australia Holdings and Australian Rural Capital (ARC) will terminate their $371 million bid, with Dakang withdrawing its foreign investment review board (FIRB) application after Treasurer Scott Morrison rejected the offer on national interest grounds.
But the Dakang and ARC plan to negotiate and explore options to proceed with a fresh bid for the vast S Kidman and Co cattle stations portfolio of more than 100,000 square kilometres.
Kidman managing director Greg Campbell said the Kidman family shareholders were against a break-up of the 120-year-old company and would be seeking clarity from the Australian government around the level of foreign investment that was deemed acceptable.
"It is important to note that no final bids were received from Australian parties at any time during the extensive and lengthy sale process," Mr Campbell said in a statement.
"A break up of the business to sell properties separately would result in significant reduction in Kidman's value, reduced production of up to 3,000 tonnes of beef per annum, the loss of 50 jobs from the present structure, and lower tax revenue for the country."
Mr Campbell said the country's largest private landholding was currently 34 per cent foreign owned.
Treasurer Scott Morrison on Friday rejected the $371 million bid for Kidman on national interest grounds and gave Dakang and ARC until Tuesday to respond to his concerns.
He said the size of the Kidman portfolio made it difficult for any single Australian group to acquire the entire operation.
It comes at a sensitive time for the federal government which is preparing for a federal election and as a crowdfunding campaign by DomaCom to buy Kidman gathers pace, with more than $72 million already pledged.
Mr Morrison has said the size and significance of the portfolio must be taken into account.
Australian Rural Capital, the ASX-listed partner of the Chinese firm bidding for the S Kidman and Co pastoral properties, said on Tuesday that it and Dakang Australia will work on a new bid structure acceptable to the Kidman board, shareholders and Mr Morrison.
ARC, Dakang Australia and Kidman have subsequently entered into a binding deed to explore other options.
"The deed specifies and sets out the intentions of ARC, Dakang Australia and Kidman that the parties will continue to, in good faith, negotiate and explore options for an amended structure for the transaction to proceed," ARC said in a statement on Tuesday.
After coming out of a trading halt that was requested on Monday, ARC shares were steady at 50 cents.
Share
